Skilled nursing and other long term care facilities commonly known as “nursing homes” (“LTC facilities”),[i] rehabilitation, assisted living, retirement and other facilities and communities caring for elderly, disabled, aged or other infirm patients or residents should use recently released tools to confirm the adequacy of and update their current COVID-19 and other infectious disease prevention and control and other key policies and practices with the latest Centers for Medicare & Medicaid Services (CMS) and Centers for Disease Control and Prevention (CDC) requirements and guidelines in light of recently announced changes to CMS nursing home inspection policies (the “Targeted Inspection Policy”)[iii] that target nursing homes with COVID-19 outbreaks or death for likely inspection announced March 23, 2020 including all existing requirements including new “recommendations” on nursing homes on COVID-19 preparedness and response announced April 2, 2020 (the “April Recommendations”).[iii]

Prompted by the continuing explosive growth in COVID-19 infection and deaths among nursing home residents and widespread deficiencies found during recent inspections at the Kirkland, Washington Life Care Center nursing homes (the “Kirkland Facilities”) made notorious by the death of 23 people and other nursing homes with COVID-19 inspections, the Targeted Inspection Policy and April Recommendations supplement and give more teeth to the CMS Guidance for Infection Control and Prevention of Coronavirus Disease 2019 (COVID-19) in Nursing Homes (the “3/3 Directive”)[iv] previously released by CMS released in conjunction with President Trump’s Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak (“COVID Emergency Declaration”) in response to concerns raised by reports of 19 COVID-19 related deaths at the Kirkland Facilities[v] on March 13, 2020.

Despite CMS and CDC’s efforts to reign in nursing home based COVID-19 infections and deaths by ordering nursing homes in the Nursing Home Directive to limit outside visitors and take other precautions outlined in the Nursing Home Directive and release of other guidance and tools, nursing home based COVID-19 infections and deaths have continued to soar since March 13, 2020.[vi] Meanwhile, onsite audits at the Kirkland Facilities and other facilities during March uncovered concerning deficiencies in the compliance at the Kirkland Facilities and many other nursing homes across the nation, as well as the need to address other weaknesses in current CMS and CDC practices and guidelines that the agencies determined were perpetuating practices that left nursing home residents exposed to COVID-19.

The new Targeted Inspection Policy and April Recommendations attempt to address these compliance and other concerns by updating, clarifying and supplementing previously established requirements and guidance, providing new tools for nursing homes and their inspectors to use to assess nursing home compliance with the latest standards and stepping up inspections and enforcement of nursing homes that experience COVID-19 outbreaks.[vii]

April Recommendations Send Warnings, Share New Tools

To this end, the just announced April Recommendations urge nursing homes to move quickly to clean up their practices by:

Urging nursing homes to immediately ensure that they are complying with all CMS and CDC guidance related to COVID-19 and other infection control and other requirements;

Urging nursing homes to ensure all staff are using appropriate PPE when interacting with patients and residents, to the extent PPE is available and per CDC guidance on conservation of PPE;

Confirming the availability of Medicare coverage of Medicare enrolled residents performed by laboratories and that facilities can allow laboratory personnel into facilities to perform the tests;

Urging State and local leaders to consider the needs of long term care facilities with respect to supplies of PPE and COVID-19 tests as nursing homes are a critical part of the healthcare system, and because of the ease of spread in long term care facilities and the severity of illness that occurs in residents with COVID-19,

Recommending facilities use separate staffing teams for residents to the best of their ability to avoid transmission within nursing homes in response to evidence that using staff shared between multiple facilities helped to fuel the COVID-19 outbreak in the Kirkland Facilities;

Consistent previously published guidance and resources on the CDC Isolation Sites and Alternative Care Sites webpage,[ix] urging nursing homes to work with State and local leaders to designate separate facilities or units within a facility to separate COVID-19 negative residents from COVID-19 positive residents and individuals with unknown COVID-19 status; and

Encouraging facilities to use new targeted survey assessment tools adopted by CMS to guide inspections under the Targeted Inspection Program to self-assess and make appropriate adjustments to tighten their facility compliance with applicable requirements and guidelines promptly.

While characterized as “recommendations,” the reaffirmation in the April Recommendations that CMS intends to continue to follow the new Targeted Inspection Policy announced March 23, 2020 sends a strong message to all nursing homes that CMS does not view compliance with the recommendations as optional.

According to CMS’ announcement regarding the Targeted Inspection Policy, only the following types of federal inspections will be prioritized and conducted over the next few weeks:

Complaint inspections: State survey agencies will continue to conduct inspections related to complaints and facility-reported incidents that are triaged at the Immediate Jeopardy level. Inspectors will use a streamlined Infection Control review tool, regardless of the Immediate Jeopardy allegation.

Targeted Infection Control inspections: Federal and state inspectors will conduct targeted infection control inspections of providers identified through CMS collaboration with the Centers for Disease Control and Prevention (CDC). These inspectors will use a streamlined targeted review checklist to minimize the impact on provider activities, while ensuring providers are implementing actions to protect health and safety. This will consist of both onsite and offsite inspections.

Self-Assessments: The Infection Control checklist referenced above will also be shared with providers and suppliers, to allow for self-assessment of their Infection Control plans. This may be the best solution in some cases when there is a lack of personal protective equipment or state surveyors available.

During this time frame, CMS has indicated it will not conduct the following inspections:

Standard inspections for nursing homes, hospitals, home health agencies, intermediate care facilities for individuals with intellectual disabilities, and hospices; and

Revisit inspections not associated with Immediate Jeopardy.

In addition to redefining the priorities and scope for conducting inspections in the new Targeted Inspection Policy, CMS also refocused the inspection process that surveyors are expected to use when conducting inspections under the Targeted Inspection Policy which includes existing components of CMS’s infection control inspection process updated to include the latest CDC and CMS guidance. Under the Targeted Inspection Policy CMS and state inspectors will be guided by a newly developed and updated targeted assessment tool in assessing if certain facilities are prepared to meet CMS’s expectations for preventing the spread of COVID-19. When gaps are identified, CMS warns that facilities will be required to take corrective actions to close the gaps.

Facilities are well advised to follow the recommendation of CMS to use the new surveyor tools to self-assess their own ability to prevent the spread of COVID-19 in accordance with applicable CMS requirements both to mitigate potential exposures to CMS sanctions and because CMS also is encouraging residents and families to be proactive about nursing home safety by among other things asking facility staff how the facility performed on its self-assessment. Facilities and their leaders at all times should keep in mind the significant risks that they are likely to incur if significant deficiencies are found from an inspection. While the March 23, 2020 announcement of the Targeted Inspection Policy states that CMS is not seeking to be punitive, but rather to respond to urgent issues while proactively ensuring providers are compliant with federal health and safety standards. Accordingly, CMS has indicated that CMS intends to exercise enforcement discretion, unless Immediate Jeopardy situations arise. Given the conclusions announced regarding Immediate Jeopardy findings found from the inspection at the Kirkland Facility, however, nursing homes are well advised to assume that the occurrence of COVID-19 related deaths or infections at their facilities might create a significant risk of Immediate Jeopardy findings with regard to their facilities which could result in significant sanctions.

CMS and other agencies continue to tailor their response to the COVID-19 outbreak. In addition to verifying and maintaining their compliance with current COVID-19 and other CMS, CDC and state and local requirements and guidelines, nursing homes and their leaders also should continue to monitor emerging developments and guidance from CMS, CDC, the Federal Emergency Management Agency (“FEMA”) and their state and local regulatory bodies.

[i] Nursing homes (also known as “skilled nursing facilities” under the Medicare program and “nursing facilities” under Medicaid; or “long-term care facilities”).

[viii] Facilities that have not already done so should consult with experienced legal counsel for assistance about the advisability of providing or posting notifications and/or securing consents to these screening procedures, advisable or recommended procedures regarding the collection, use, or disclosure of screenings or their results, or other safeguards to manage relevant privacy or other legal rights or risks.

We hope this update is helpful. In addition to this update, the author also has prepared a more comprehensive discussion of these concerns scheduled for publication by the American Bar Association Health Publication in April, 2020. To request access for a prepublication unofficial manuscript of that upcoming publication or of more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively on pandemic, business and other crisis planning, preparedness and response for more than 30 years.

Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EHR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.

This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EHR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.

Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, as well as a multitude of other health industry matters, workforce and health care change and crisis management and other highly regarded publications and presentations, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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The U.S Department of Health and Human Services (HHS) Office for Civil Rights (OCR) announced Health Insurance Portability & Accountability Act Privacy Rule 2019 Novel Coronavirus (COVID-19) emergency enforcement relief for certain covered health care providers and their business associates participating in the operation of mobile, drive-through, or walk-up COVID-19 specimen collection and testing sites that only provide COVID-19 specimen collection or testing services to the public (Community-Based Testing Sites, or CBTS). The Notification of Enforcement Discretion ON CBTS During The COVID-19 Nationwide Public Health Emergency (“Notice”) expands upon the series of HIPAA enforcement relief and other flexibility OCR has granted to health care providers and other HIPAA-covered entities and business associates when dealing with the COVID-19 National Health Emergency declared by President Trump on March 13, 2020.

According to Director Roger Severino, the limited enforcement relief in the Notice is intended “to encourage the growth of mobile testing sites so more people can get tested quickly and safely.” Under the April 9, 2020 Notice, OCR will not impose penalties for violations of HIPAA regulatory requirements committed by covered entities or business associates in connection with their good faith participation in the operation of COVID-19 testing sites during the COVID-19 nationwide public health emergency. The enforcement relief provided by the s retroactive to violations committed on or after March 13, 2020 even though just announced on April 9.

The enforcement relief applies to all HIPAA covered health care providers and their business associates when such entities are, in good faith, participating in the operation of a CBTS. According to the Notice, operation of a CBTS includes all activities that support the collection of specimens from individuals for COVID-19 testing. Covered entities and business associates intending to rely upon the enforcement relief need to understand its limited scope. The relief only applies to health care providers or their business associates when participating in CBTS related activities. It does not apply to non-CBTS related activities of health care providers or their business associates including the handling of PHI outside of the operation of a CBTS or to health plans, health care clearinghouses, or their business associates performing health plan and clearinghouse functions. To the extent that an entity performs both plan and provider functions, the Notice says the relief only applies to the entity in its role as a covered health care provider and only to the extent that it participates in a CBTS. Covered entities and business associates not covered by the CBTS relief provided by the Notice generally remain subject to all otherwise applicable HIPAA requirements except as otherwise provided in the Telehealth Relief or other COVID-19 related flexibilities granted by OCR in the OCR COVID-19 HIPAA Bulletin or other previously issued HIPAA guidance for dealing with public emergencies,

While committing that OCR will not take HIPAA enforcement action against covered entities or business associates for violating HIPAA’s regulatory requirements during the COVID-19 emergency, the Notice nevertheless encourages covered entities and business associates participating in the good faith operation of a CBTS to implement reasonable safeguards to protect the privacy and security of individuals’ PHI including:

Using and disclosing only the minimum PHI necessary except when disclosing PHI for treatment.

Setting up canopies or similar opaque barriers at a CBTS to provide some privacy to individuals during the collection of samples.

Controlling foot and car traffic to create adequate distancing at the point of service to minimize the ability of persons to see or overhear screening interactions at a CBTS. (A six foot distance would serve this purpose as well as supporting recommended social distancing measures to minimize the risk of spreading COVID-19.)

Establishing a “buffer zone” to prevent members of the media or public from observing or filming individuals who approach a CBTS, and posting signs prohibiting filming.

Using secure technology at a CBTS to record and transmit electronic PHI.

Posting a Notice of Privacy Practices (NPP), or information about how to find the NPP online, if applicable, in a place that is readily viewable by individuals who approach a CBTS.

While OCR says the Notice’s enforcement relief for CBTS related activity is not conditional upon adherence to these recommendations, CBTS involved covered entities and business associations should keep in mind that the OCR relief does not necessarily affect their otherwise applicable requirements, if any, to comply to these and other health or medical privacy, data security, confidentiality or other similar requirements applicable under otherwise applicable state statutory or common laws, regulations, accreditation or credentialing, contractual or other legally relevant requirements or standards.

Today, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) released two comprehensive toolkits on telehealth:

The Toolkits’ release follows up on last week’s Centers for Medicare & Medicare Services (“CMS”) loosening of requirements for Medicare coverage of telehealth services and privacy and data security requirements so that beneficiaries can receive a wider range of services from their doctors without having to travel to a healthcare facility on a temporary and emergency basis under the 1135 waiver authority and Coronavirus Preparedness and Response Supplemental Appropriations Act.

COVID-19 Emergency TeleHealth Waivers & Rules

Under this temporary new waiver, Medicare can pay for office, hospital, and other visits furnished via telehealth across the country and including in patient’s places of residence starting March 6, 2020. The waiver applies to a range of providers, such as doctors, nurse practitioners, clinical psychologists, and licensed clinical social workers, will be able to offer telehealth to their patients.

New TeleHealth Toolkits

Each of the telehealth toolkits released today contains electronic links to reliable sources of information on telehealth and telemedicine, which will reduce the amount of time providers spend searching for answers and increase their time with patients. HHS intends these links to help providers choose learn about the general concept of telehealth, choose telemedicine vendors, initiate a telemedicine program, monitor patients remotely, and develop documentation tools. Additionally, the information contained within each toolkit also outlines temporary virtual services that could be used to treat patients during this specific period of time.

COVID-19 Temporary Limited Scope HIPAA Privacy Telehealth Relief

The HHS COVID-19 emergency teleheath waivers follow up on the HHS Office for Civil Rights (OCR) March 20, 2020 Notification of Enforcement Discretion on Telehealth Remote Communications (the “Notice”) announcing temporary, limited scope enforcement relief from some, but not all of the requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy, Security and Breach Notification Rules for health care providers using “non-public facing” communication technologies to provide telemedicine services during the COVID-19 health care emergency

Intended to allow health care providers greater latitude under HIPAA to communicate with patients and provide telehealth services through remote communications technologies during the COVID-19 national emergency, the Notice allows covered health care providers wishing to use audio or video communication technology to provide telehealth to patients during the COVID-19 nationwide public health emergency the option to any availabe “non-public facing” remote communication product to communicate with patients if the platform by verifying the platform is HIPAA compliant and securing the necessary business associate agreement (“BAA”) with the communication provider.

Specifically the Notice announces OCR is exercising its enforcement discretion not to impose penalties for noncompliance with the HIPAA Rules in connection with the good faith provision of telehealth using non-public facing audio or video communication products during the COVID-19 nationwide public health emergency in accordance with the requirements set forth in the Notice. The non-enforcement policy applies to telehealth provided for any reason, regardless of whether the telehealth service is related to the diagnosis and treatment of health conditions related to COVID-19. During the COVID-19 emergency, this relief for non-public facing remote communications allows a health care providers the flexibility when it determines appropriate in his or her professional judgement to request to examine a patient using a video chat application connecting the provider’s or patient’s phone or desktop computer in order to assess a greater number of patients while limiting the risk of infection of other persons who would be exposed from an in-person consultation.

The relief does not apply to “public facing” remote communications however, Facebook Live, Twitch, TikTok, and similar video communication applications are considered “public facing.” The OCR bulletin states health care providers should not use any of these or other public facing remote communications to provide telehealth services under the Bulletin.

The Notice also alerts health care providers providing telemedicine services under the Notice need to ensure they have in place appropriate business associate agreements {“BAAs”) with each technology vendors used to conduct these communications and that the vendor is otherwise HIPAA compliant. The Notice lists the following as some vendors that have represented to OCR that they provide HIPAA-compliant video communication products and that they will enter into a HIPAA BAA include:

Skype for Business

Updox

VSee

Zoom for Healthcare

me

Google G Suite Hangouts Meet

Providers should note that the Notice also states that OCR does not endorse, recommend or certify any of these vendors or the adequacy of their BAAs. Consequently, providers intending to use any of thes platforms should conduct their own documented due diligence to confirm that the necessary HIPAA requirements are met. Providers also should keep in mind that the OCR Notice does not modify any otherwise applicable federal or state law, contractual or ethical requirements that may apply to their use of these telemedicine platforms. As many provider’s HIPAA notices may have included statements inconsistent with the use of these technologies, the provider should consider providing notification of the change of its practices that includes disclosures about potentially lower privacy protections. Because the relief is limited in scope and duration, providers relying on the relief also will need to closely monitor developments and adjust practices as necessary when the emergency waivers expire or are modified.

Health care providers, health plans, health care clearinghouses and their business associates hoping to rely upon the relief in the CBTS Notice, the Telehealth Relief, the OCR COVID-19 HIPAA Bulletin or other previously issued HIPAA guidance for dealing with public emergencies, need to verify their qualification and compliance with that guidance. In the meantime, all HIPAA covered entities and business associates also should be cognizant of the advisability of also conducting timely, documented risk assessments and taking other necessary steps to ensure that they can demonstrate that their ongoing operations, taking into account any COVID-19 specific changes in operations, systems, locations, business associates or other HIPAA relevant arrangements or operations, comply with all remaining relevant requirements of HIPAA or other relevant federal or state statutory, regulatory, common law, ethical, contractual or other requirements. This is particularly important with respect to modification locations, equipment, or other COVID-19 related changes may impact or disrupt usual operations or involve the use, access, disclosure, retention or transmission of protected health information or other sensitive data outside of processes, systems or location previously subject to a risk assessment to confirm and document adequate compliance with HIPAA or other relevant requirements. To the extent that any deficiencies may have occurred, timely action should be taken to conduct an appropriate documented investigation and risk assessment, and provide any necessary breach notification or other corrective action necessary to correct or mitigate those events. Because of the potential sensitivity of these activities, health care providers, health plans, health care clearinghouses and their business associations should consider contacting experienced legal counsel to arrange for those activities to be structured to preserve the possibility of using attorney-client privilege or other legal privileges to help defend sensitive communications or evaluations against discovery in the event of a future litigation or administrative investigation.

More Information & Resources

We hope this update is helpful. If you need assistance reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. To learn more about Ms. Stamer, her services, experience, publications or involvements; to review or request other developments, publications, resources and tools; or to register for future updates, see www.cynthiastamer.com, see www.cynthiastamer.com; connect on LinkedIn or Facebook; or contact us via e-mail or via telephone at (214) 452 -8297

About The Author

Cynthia Marcotte Stamer is a practicing attorney, management and regulatory affairs consultant, author and lecturer, who has worked extensively on pandemic and other crisis planning, preparedness and response and other business change, risk, compliance and operation management throughout her 30 plus year career.

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American Bar Foundation, the Texas Bar Foundation and the American College of Employee Benefit Counsel, Ms. Stamer is widely recognized for her pragmatic, leading edge work, scholarship and thought leadership on domestic and international, public and private sector health care and managed care, workforce and performance, safety, legal and operational compliance and risk management, crisis preparedness and response, and other essential legal and operational concerns.

Her experience includes extensive work domestically and internationally with hospitals, health care systems, clinics, skilled nursing and other long term care, rehabilitation and other health care facilities; physicians, medical staff and other health care providers and organizations; accreditation, peer review and quality committees and organizations; health care management and technology and other health and managed care industry clients; self-insured and insured health and other employee benefit plans, their sponsors, fiduciaries, administrators, insurers and service providers and other payers; employers; billing, utilization management, quality, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EHR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.

Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and the author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans and a multitude of other publications and workshops on health and other disaster and other crisis preparedness, risk management and response, as well as a multitude of other health care, workforce and other management and regulatory affairs publications and presentations, Ms. Stamer also shares her thought leadership through her extensive and diverse involvement in a broad range of other professional and civic organizations. Examples of these involvements include her service as the current American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative; past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; former ABA RPTE Employee Benefits & Other Compensation Group Chair and Past Chair and current Co-Chair of its Welfare Benefits Committee; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas; former technical advisor to the National Physicians Council on Health Care Policy; former member of the Stem Cell Advisory Committee; and in a multitude of other professional, trade, civic and community service organizations.

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Reducing health care providers burdens from using electronic health records (“EHRs”) and promoting the better uses of electronic medical data in medical research are the focus of two new health information technology (“health IT”) policy documents released this week by the Department of Health & Human Services (“HHS”) Office of the National Coordinator for Health Information Technology (“ONC”). Health care providers, health researchers, health plans, health care clearinghouses and other health data collectors or users, as well as health IT providers and other interested persons will want to evaluate carefully these new ONC releases for insights about policy and other efforts ONC is promoting to shape the use of health IT and data.

Reducing Health IT and EHR Burdens On Providers

On February 21, 2020, ONC moved forward on its efforts to implement “a comprehensive strategy to reduce the regulatory and administrative burden related to the use of health IT, including EHRs” by publishing its “Strategy on Reducing Regulatory and Administrative Burdens Relating to the Use of Health IT and EHRs” (the “EHR Report”) targets burdens tied to regulatory and administrative requirements that HHS can directly impact through the rulemaking process. A collaborative effort between ONC and the Centers for Medicare & Medicaid Services (CMS), the report’s strategies was developed in response to a Congressional mandate in the 21st Century Cures Act, which directed HHS to develop a plan of action to reduce regulatory and administrative burden relating to the use of health IT and EHRs and finalizes the draft version of this strategy ONC released in November 2018. Based on stakeholder input, the final HER Report outlines three overarching goals designed to reduce clinician burden:

Reduce the effort and time required to record health information in EHRs for clinicians;

Reduce the effort and time required to meet regulatory reporting requirements for clinicians, hospitals, and healthcare organizations; and

Improve the functionality and ease of use of EHRs.

ONC says reducing unnecessary regulatory burden will alleviate time spent on administrative tasks. For example, during listening sessions with clinicians, we heard criticism that the documentation guidelines for Evaluation and Management (E/M) visits were a source of EHR-related burden and overly complicated. They told us these requirements result in “pajama time,” where physicians spend hours after clinic sessions and on weekends entering data to satisfy billing and quality reporting requirements. Poor usability features within EHRs can further exacerbate this issue, as clinicians find it difficult to navigate long records within the EHR interface. Based on this feedback, the report covers four key areas:

In addition to responding to the direction included in the EHR Report, health care and health IT providers also will want to continue to monitor and communicate with ONC. While moving forward on the implementation of the objectives identified in the EHR Report, ONC says it plans to continue to reach out and engage the clinician community and other key stakeholder communities and to monitor emerging and ongoing burdens related to the use of EHRs, such as burdens related to EHR inbox management and other efforts to enable further automation in health care, with a focus on prior authorization, quality reporting, and other aspects of our current system that can reduce time spent using health IT.

The Agenda is the latest in a series of priorities, agendas and other initiatives adopted by ONC since its establishment in furtherance of its legislative mandate under the Health Information Technology for Economic and Clinical Health Act (HITECH Act) of 2009 to improve the health and well-being of individuals and communities through the use of technology and health information.

Health care providers, plans, technology vendors and providers and other stakeholders impacted by ONC and other electronic medical record or health IT systems should take into account the likely implications of these and other ONC pronouncements on their programs and practices when planning and updating them.

We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EHR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.

This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EHR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.

Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

Health care providers, health plans, health care clearinghouses and their records providers and other business associates should review and update their existing policies and practices on the charge and other procedures for responding to third party requests for records containing protected health information (“PHI”) in response to newly allowed flexibility created by the January 23, 2020 federal district court order (the “Coix Order”) in Coix Health, LLC v. Azar, et al, No 18 –CV-0040 (D>D.C. January 23, 2020) that bars enforcement of certain requirements of the Department of Health & Human Service (“HHS”) Office of Civil Rights (“OCR”) rules implementing patient rights to access to PHI created by the Health Insurance Portability & Accountability Act (“HIPAA”)from health plans, health care providers, health care clearinghouses (“”Covered Entities”) and their business associates (“HIPAA entities”). Utilizing the flexibility resulting from the Coix Order could help reduce health plan costs of compliance with the HIPAA right of access rule by allowing the health plan and its records providers more freedom to determine the charges and format for delivering PHI in response to records requests received from other insurers, lawyers and other third parties.

Coix Order Invalidates Pieces of OCR HIPAA Rules On PHI Record Rules

The new flexibility results from a January 23, 2020 Coix Order in response to a lawsuit brought by Coix Health, LLC (“”Coix”) challenging the “Patient Rate” and other provisions of OCR’s regulation implementing HIPAA’s right of access requirements under 45 C.F.R. §164.524 as adopted by OCR as part of its final rule entitled “Modifications to the HIPAA Privacy, Security, and Enforcement Rules Under the Health Information Technology for Economic and Clinical Health Act, and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules.” (The “2013 Omnibus Rule”) on January 25, 2013. In particular, the 2013 Omnibus Rule includes a “Patient Rate” rule that limits the charges that Covered Entities can make for delivering PHI requested by patients and third parties to prevent patient access to PHI from being thwarted by excessive fees. As part of the Patient Rate rule, OCR restricted what Covered Entities and their records providers can charge to provide copies of protected health information. The Patient Rate rule restricts charges that can be imposed to provide protected health information, restricts the methods for calculating these charges and limits the type and amount of labor costs that can be included when calculating the Patient Rate. The Patient Rate rule in the 201 Omnibus Rule also requires that Covered Entities and their records companies provide the requested PHI directly to the patient or to a third party designed by the patient and in the format requested by the patient regardless of the format in which the Covered Entity or its medical provider maintains the PHI within its record.

When originally implemented, the medical records industry generally understood that the Patient Rate limitations applied only to requests for PHI made by the patient for use by the patient. Before 2016, however, Covered Entities and their medical records providers generally understood that this Patient Rate rule did not apply to or limit fees that Covered Entities or their medical records providers could charge commercial entities or other third parties like insurance companies and law firms to fill requests for PHI. That understanding changed, in 2016, however, when HHS issued guidance that stated that the Patient Rate applies even to requests to deliver PHI to third parties.

A specialized medical-records provider that contracts with healthcare suppliers nationwide to maintain, retrieve, and produce individuals’ PHI, Cox handles tens of millions of requests for records containing PHI annually including demands by healthcare providers for treatment purposes, patients asking for their own PHI, and third parties, such as life insurance companies and law firms, seeking a patient’s PHI for commercial or legal reasons. According to Cox, OCR’s interpretation of the Patient Rate rule as applicable to third party requests as well as direct patient requests cost it and other medical records companies millions of dollars in revenue. Accordingly, Coix filed the Coix Health, LLC v. Azar, et al lawsuit challenging OCR’s 2016 application of the Patient Rate to third party requests as violating the procedural and substantive protections of the Administrative Procedure Act (“APA”). In addition to this challenge to the scope of the Patient Rate, Coix also contested OCR pronouncements in the 2016 guidance document on (1) the types of labor costs that are recoverable under the Patient Rate; and (2) the three alternative methods identified for calculating the Patient Rate as violating the APA’s procedural and substantive provisions. Finally, Coix also challenged the requirement in the Patient Rate rule that records companies to send PHI to third parties regardless of the format in which the PHI is contained and in the format specified by the patient. According to Coix, Congress required only that certain types of electronic health records be delivered to third parties, not all records regardless of their format, as HHS’s regulations now command.

In its January 23, 2020 ruling on HHS’s motion to dismiss and the parties’ cross-motions for summary judgment, the D.C. District Court agreed with OCR that OCR’s rule requiring the use of one of three methods for calculating the Patient Rate was unreviewable as a final agency action and dismissed Coix’ challenge to that requirement. Concerning Coax’s other challenges, the Court sided with Coix. It ruled that:

OCR’s 2013 rule compelling delivery of PHI to third parties regardless of the records’ format is arbitrary and capricious insofar as it goes beyond the statutory requirements set by Congress;

OCR’s broadening of the Patient 3 Rate in 2016 is a legislative rule that the agency failed to subject to notice and comment in violation of the APA; and

OCR’s 2016 explanation concerning what labor costs can be recovered under the Patient Rate is an interpretative rule that OCR was not required to subject to notice and comment.

Accordingly, District Court in the Coix Order declares unlawful and vacates (1) the 2016 Patient Rate expansion and (2) the 2013 mandate broadening PHI delivery to third parties regardless of format within the individual right of access” set forth in the provisions of 45 C.F.R. §164.524 of the 2013 Omnibus Rule insofar as it expands the HITECH Act’s third-party directive beyond requests for a copy of an electronic health record with respect to protected health information of an individual in an electronic format.” Additionally, the federal court ordered that the fee limitation set forth at 45 C.F.R. § 164.524(c)(4) only apply to an individual’s request for access to their own records, and does not apply to an individual’s request to transmit records to a third party.

OCR Plans To Comply With Coix Order In Applying Patient Record Rule

In an “Important Notice Regarding Individuals’ Right of Access to Health Records” released January 28, 2020, OCR announced that that it will comply with the Coix Order vacating the “third-party directive” within the individual right of access “insofar as it expands the HITECH Act’s third-party directive beyond requests for a copy of an electronic health record with respect to [protected health information] of an individual . . . in an electronic format.” Additionally, OCR stated that the fee limitation set forth at 45 C.F.R. § 164.524(c)(4) will apply only to an individual’s request for access to their own records, and not apply to an individual’s request to transmit records to a third party. However, OCR also added that the right of individuals to access their own records and the fee limitations that apply when exercising this right are undisturbed and remain in effect. OCR will continue to enforce the right of access provisions in 45 C.F.R. § 164.524 that are not restricted by the court order.

Update Patient Rate & Access Provisions OfHIPAA Policies & Notices

As a result of the Coix Order, Covered Entities and their medical records providers still must calculate the Patient Rate in accordance with one of the three allowed methodologies when providing a patient with records containing PHI in response to a patient request. However, Covered Entities and their medical records provider now may exercise greater flexibility when determining the format and charges when responding to requests from third parties other than the patient for records containing PHI. Before doing so, however, most Covered Entities and business associates will want to update their HIPAA policies and procedures to reflect the new practices consistent with the new HIPAA and other relevant requirements. Updating the policies first is important because the 2013 Omnibus Rule states Covered Entities violate HIPAA by failing to follow their own HIPAA privacy and security policies when those practices are more restrictive than those mandated by OCR’s 2013 Omnibus Rule. Consequently however, Covered Entities and their medical records companies desiring to exercise this newly available flexibility should revise their existing policies and procedures to authorize their exercise of this new flexibility consistent with the Coix Order and associated OCR guidance.

More Information

We hope this update is helpful. For more information about the Coix Order or other health or other employee benefits, human resources, or health care developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.

This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.

Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation considering the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone of any fact or law specific nuance, change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

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The $65,000 payment and corrective action plan commitments West Georgia Ambulance, Inc. (“West Georgia”) is making to settle Department of Health & Human Services Office for Civil Rights (“OCR”) charges it recurrently violated the Health Insurance Portability and Accountability Act (“HIPAA”) Security Rule sends a warning to all oher HIPAA-covered health care providers, health plans, health care clearighouses and their business associates (“covered entities”)maintain and be prepared to defend their own HIPAA compliance under a Resolution Agreement and Corrective Action Plan (“Resolution Agreement”) OCR announced on December 30, 2019.

The Resolution Agreement resolves charges resulting from an OCR investigation initiated in response to a HIPAA breach report the Georgia based ambulance company filed in 2013 in which the company, which provides emergency and non-emergency ambulance services in Carroll County, Georgia, disclosed the loss of an unencrypted laptop containing the protected health information (PHI) of 500 individuals. The breach occurred when an unencrypted laptop fell off the back bumper of an ambulance. The laptop was not recovered. West Georgia reported that exactly 500 individuals were affected by the breach.

In the course of its investigation of the breach report, OCR’s investigation uncovered long-standing noncompliance with the HIPAA Rules, including failures to conduct a risk analysis, provide a security awareness and training program, and implement HIPAA Security Rule policies and procedures. Specifically, the Resolution Agreement states that West Georgia:

Did not conduct an accurate and thorough risk analysis of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its ePHI. See 45 C.F.R. § 164.308(a)(1)(ii)(A);

Failed to have a HIPAA security training program, and failed to provide security training to its employees. See 45 C.F.R. § 164.308(a)(5);

Despite OCR’s investigation and technical assistance, “did not take meaningful steps to address their systemic failures.”

To resolve its exposure to the substantially higher civil monetary penalties that OCR could impose for violations of this nature, West Georgia agreed to pay a $65,000 resolution payment to OCR and implement and comply with a corrective action plan that in addition to requiring West Georgia to correct the compliance deficiencies, also subjects West Georgia to two years of OCR monitoring and oversight.

The Resolution Agreement and corrective action plan carry a number of important messages for other health care providers and other Covered Entities. First, the OCR enforcement action against West Georgia coming at the end of yet another heavy HIPAA enforcement year by OCR reminds Covered Entities that OCR is serious about HIPAA enforcement on the heels of its 2018 HIPAA record setting collection of $28.7 million in civil monetary penalties and resolution payments including the single largest individual HIPAA settlement in history of $16 million with Anthem, Inc. See OCR Concludes 2018 with All-Time Record Year for HIPAA Enforcement. While not topping this record, OCR during 2019 now has collected civil monetary penalties and resolution payments totaling more than $15 million from HIPAA Covered Entities and their business associates including:

Second, the Resolution Agreement and various other smaller settlements during the year show HIPAA compliance and enforcement is a concern for smaller provideres and other covered entities, not juswt the huge ones. While the $65,000 settlement payment required by the Resolution Agreement is substantially smaller than the amounts of the civil monetary penalties and many of resolution payments OCR collected in its other 2019 enforcement actions, the West Georgia and other 2019 enforcement actions demonstrate the teeth behind the warning in the OCR Press Release announcing the West Georgia Resolution Agreement from OCR Director Roger Severino that“All providers, large and small, need to take their HIPAA obligations seriously.” With OCR promises to keep up its vigorous investigation and enforcement of the HIPAA requirements, every Covered Entity and business associate should take the necessary steps to verify and maintain their HIPAA compliance and to be prepared to defend their compliance under the Privacy, Security, Breach Notification and HIPAA access and other individual rights mandates of HIPAA.

Third, OCR’s statement in the Resolution Agreement about the failure by West Georgia to meaningfully act to correct compliance deficiencies and cooperate in other corrective action during the period following the breach report highlights the importance for covered entities involved in a breach or other dealings with OCR on a potential compliance concern to behave appropriately to express and exhibit the necessary concern OCR expects regarding the compliance issue to position themselves to request and receive the clemency OCR is empowered under HIPAA to extend when deciding the sanctions for any noncompliance.

Of course meeting the requirements of HIPAA is not the only concern that covered entities should consider as they review and tightened their HIPAA and other privacy and data security procedures. Health care providers and other covered entities also should keep in mind their other obligations to protect patient and other confidential information under other federal laws, the requirements of which also are ever-evolving. For instance, on January 1, 2020 Texas providers like other Texas businesses will become subject to a shortened deadline for providing notice of data breaches under a new law enacted by the Texas Legislature in its last session. Arrangements should be designed to fulfill all of these requirements as well as any ethical or contractual.

Covered entities also should keep in mind that violations of HIPAA can have implications well beyond HIPAA.ramifications beyond HIPAA itself. For instance, heath care providers can face disqualification from federal program participation, licensing and ethics discipline and other professional consequences. Health plans and their fiduciaries also may face Department of Labor and other fiduciary claims, while insurers can face licensing and other regulatory consequences.

For More Information

We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Scribe for the ABA JCEB Annual Agency Meeting with the Department of Health & Human Services Office of Civil Rights, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer has extensive legal, operational, and public policy experience advising and representing health care, health care and other entities about HIPAA and other privacy, data security, confidentiality and other matters.

Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, public and private primary, secondary, and other educational institutions, and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has recurrently worked extensively with public school districts and public and private primary and secondary schools, colleges and universities, academic medical, and other educational institutions, insured and self-insured health plans; domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, employers; and federal and state legislative, regulatory, investigatory and enforcement bodies and agencies on health care, education, and other data privacy, security, use, protection and disclosure; disability and other educational rights; workforce, and a host of other risk management and compliance concerns.

Ms. Stamer is most widely recognized for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.

Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

The Department of Justice today sued the nation’s largest long term care pharmacy provider, Omnicare, and its parent company, CVS Healthcare Corporation seeking seeks damages and civil penalties under the False Claims Act for fraudulently billing federal healthcare programs for hundreds of thousands of non-controlled prescription drugs DOJ says Omnicare illegally dispensed to elderly and disabled individuals in assisted living facilities, group homes, independent living communities, and other non-skilled residential long-term care facilities (“LTC facilities”).

In the civil health care fraud complaint the DOJ filed a New York Federal District Court, the Omnicare illegally dispensed and billed the federal government and patients for antipsychotics, anticonvulsants, and antidepressants to elderly and disabled residents in LTC facilities without proper prescriptions. DOJ’s lawsuit alleges that instead of obtaining new prescriptions from patients’ doctors after the old ones had expired or run out of refills, Omnicare just assigned a new number to the old prescription and kept on dispensing drugs for months, and sometimes years, after the prescriptions expired. DOJ’s complaint alleges that Omnicare internally referred to these renumbered expired prescriptions as “rollover” prescriptions. The DOJ complaint also charges that Omnicare also submitted, or caused to be submitted false claims for payment for medications dispensed based on invalid prescriptions it internally referred to as “rollover” prescriptions” to Medicare, Medicaid, and TRICARE in violation of the False Claims Act.

Omnicare is the country’s largest provider of pharmacy services to LTC facilities. It currently operates approximately 160 pharmacies in 47 states across the United States, which dispense tens of millions of prescription drugs to LTC facilities that serve elderly and disabled individuals. CVS acquired Omnicare in May 2015, and shortly thereafter assumed an active role in overseeing Omnicare’s operations, including pharmacy dispensing practices and systems.

According to the DOJ complaint failed today, from 2010 until 2018, Omnicare and CVS allowed Omnicare pharmacies to dispense non-controlled prescription drugs to tens of thousands of elderly and disabled individuals living in LTC facilities based on prescriptions that had expired, were out of refills, or were otherwise invalid. Omnicare repeatedly disregarded prescription refill limitations and expiration dates that required doctor visits to reevaluate whether the drug should be renewed. Instead of requesting new prescriptions when old ones expired, Omnicare allowed prescriptions to “roll over.” At Omnicare, “rolling over” a prescription meant that when a prescription expired, Omnicare’s computer systems would assign the old prescription a new number and the pharmacy would continue to dispense the drug indefinitely without the need for a prescription renewal. Depending on the computer system used, Omnicare also sometimes assigned a fake number of authorized refills to a prescription – usually 99 allowable refills for Medicare patients – to allow for continuous refilling. DOJ claims that Omnicare pharmacies “rolled over” prescriptions for elderly and disabled individuals living in more than 3,000 residential long-term care facilities, including assisted living facilities operated by the largest long-term care providers in the country, such as Brookdale Senior Living, Atria Senior Living, Sunrise Senior Living Services, and Five Star Senior Living. DOJ also claims Omnicare managers exerted pressure on overwhelmed pharmacy staff to fill prescriptions quickly so that Omnicare could submit claims and collect payments.

According to the DOJ, Senior management at Omnicare and CVS knew of the practices. The DOJ complaint charges among other things that the Omnicare’s Compliance Department succinctly acknowledged the problem in an internal April 2015 email in which one Regional Compliance Officer stated: “An issue that I am running into more and more in multiple states concerns the ability of our systems to allow prescriptions to continue to roll after a year to a new prescription number without any documentation or pharmacist intervention.” A compliance officer then forwarded the email to the head of Omnicare’s Third Party Audit group, who responded that she had a “potential solution (programmed last year) but no one is rolling it out now.”

DOJ says Omnicare’s practice of illegally dispensing drugs to elderly and disabled individuals living in LTC facilities exposed these vulnerable individuals to a significant risk of harm. In contrast to traditional skilled nursing homes, where residents have access to 24-hour medical care supervised by doctors, assisted living and other non-skilled residential facilities offer more limited medical care, or none at all. In particular, these LTC facilities generally do not have doctors on staff to oversee and monitor residents’ drug therapy.

Many of the prescription drugs dispensed by Omnicare without valid prescriptions treat serious, chronic conditions, such as dementia, depression, and heart disease. They include antipsychotics, anticonvulsants, cardiovascular medications, anti-depressants, and other drugs that can have dangerous side effects and need to be closely monitored by doctors, particularly when taken in combination with other drugs by elderly patients. By repeatedly dispensing potent drugs without current and valid prescriptions, Omnicare jeopardized the health and safety of tens of thousands of individuals who continued to take the same drugs for months, and sometimes years, without consulting their doctors to determine whether the medications were still clinically appropriate.

A large percentage of the long-term care residents served by Omnicare are beneficiaries of federal healthcare programs. By dispensing drugs without valid prescriptions, Omnicare presented, or caused to be presented, hundreds of thousands of false claims to Medicare, Medicaid, and TRICARE. These claims were ineligible for payment. In addition, Omnicare knowingly transmitted false information to these federal healthcare programs that made it appear that drug dispensations were supported by current, valid prescriptions from physicians when in fact they were not.

The DOJ lawsuit resulted from the DOJ’s intervention in whistleblower lawsuits filed by former employees.

In today’s announcement of the lawsuit, Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Omnicare put at risk the health of tens of thousands of elderly and disabled individuals living in assisted living and other residential long-term care facilities by dispensing drugs for months, and sometimes years, without obtaining current, valid prescriptions from doctors. A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies. Omnicare blatantly ignored this obligation in favor of pushing drugs out the door as quickly as possible to make more money. This Office will continue to hold accountable those who put at risk people’s health and safety just to turn a profit.”

Meanwhile, HHS-OIG Special Agent in Charge Scott J. Lampert said: “Failing to consult doctors as to whether prescriptions should be refilled places patients’ health and medical care at serious risk. These automatic rollover refills could have significant consequences for vulnerable people in long term-care facilities. We will continue working with law enforcement partners to protect people depending on these taxpayer-funded government health programs.”

More information is expected to be forthcoming.

For More Information

We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.

Ms. Stamer is most widely recognized for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve fraud, substandard quality, safety, unprofessional conduct, sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.

Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

The $1.6 million civil monetary penalty (“CMP”) assessed against the Texas Health and Human Services Commission (“TX HHSC”) for violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy and Security Rules between 2013 and 2017 committed by a predecessor agency, the Department of Aging and Disability Services (“DADS”) illustrates the critical need for all HIPAA covered entities and business associates to confirm the adequacy of their enterprise wide security assessment, oversight, and other HIPAA Privacy and Security compliance and risk management including documentation of the reassessment and updating of these materials and assessments in connection with any update or change in software, systems or other system and security relevant developments.

OCR imposed the CMPs against TX HHSC for violations of HIPAA OCR found DADS committed from 2015 to 2017, before it was reorganized into TX HHSC in September 2017. Like most other large HIPAA CMPs and settlements paid to avoid CMPs, a review of the TX HSSC CMP events makes clear that the large penalty resulted mostly because of inadequate assessment and oversight of security, rather than the actual breach itself that prompted the investigation leading to the CMP assessment.

Before its merger into TX HHSC, DADS was the Texas agency primarily responsible for providing and administering the state’s long-term care services for aging and intellectually and physically disabled people. TX HHSC now administers and provides the services previously provided by DADS as part of its broader operation of state supported living centers; provision of mental health and substance use services; regulation of child care and nursing facilities; and administration of hundreds of other programs for people needing supplemental nutrition benefits, Medicaid and certain other assistance including those previously provided by DADS.

DADS Breaches & Violations

The $1.6 million CMPs assessment against TX HHSC resulted after OCR investigated a 2015 breach report made by DADS. On June 11, 2015, DADS submitted a Breach Notification Report (“Report”) notifying OCR that on April 21, 2015 names, addresses, social security numbers, treatment information and other electronic protected health information (“ePHI”) of 6,617 individuals was viewable over the internet when a software coding flaw allowed prohibited access to ePHI with access credentials when DADS moved an internal application from a private, secure server to a public server. OCR’s investigation determined that, in addition to that impermissible disclosure, DADS violated the HIPAA Security Rule by failing to conduct an enterprise-wide risk analysis and implement access and audit controls on Community Living Assistance and Support Services and Deaf Blind with Multiple Disabilities (“CLASS/DBMD”) program information systems and applications intended to collect and report information about “Utilization Management and Review” activities to the Centers for Medicare & Medicaid Services (“CMS”) for the CLASS/DBMD waiver programs.. The CMS waiver programs required DADS to collect and report to CMS applicant and enrollee community and institutional service choice, Level of Care, Plan of Care, waiver provider choice and other waiver program performance data for CLASS and DBMD as part of a required evidentiary report on all §1915(c) waiver programs. The CLASS/DBMD application glitch compromised the ePHI by allowing an undetermined number of unauthorized users to view the ePHI without verifying user credentials. TX HHSC learned of the breach from an unauthorized user who accessed ePHI in the application without being required to input user credentials. Because of inadequate audit controls, DADS was unable to determine how many unauthorized persons accessed individuals’ ePHI.

OCR initiated a compliance review of DADS on June 23, 2015 in response to the breach notification. As HIPAA Security Rule at 45 C.F.R. ·§ 164.312(a)(l) requires a covered entity to implement technical policies and procedures for electronic information systems that maintain ePHI to allow access only to those persons or software programs properly granted access rights under HIPAA Security Rule § 164.308(a)(4), OCR found that by placing the CLASS/DBMD application on their public server without requiring users to provide access credentials, TX HHSC violated HIPAA by failing to implement access controls on all of its systems and applications throughout its enterprise in violation of 45 C.F.R. § 164.312(a)(l).

The HIPAA Security Rule at 45 C.F.R. § 164.312(b) requires a covered entity to implement hardware, software, and/or procedural mechanisms that record and examine activity in information systems that contain or use ePHI. In the course of its investigation, OCR requested in its June 23, 2015 Data Request that DADS provide a copy of its current HIPAA administrative and technical policies and procedures. As DADS provided no evidence that the application was capable of auditing user access after it was moved to the unsecure public server as required by 45 C.F.R. § 164.312(b) with its response, OCR also concluded from its investigation that TX HHSC failed to implement audit controls to all of its systems and applications, like the application involved in the breach, as required by 45 C.F.R. § 164.312(b).

Beyond these violations, OCR also found that DADS also violated the HIPAA Security Rule by failing to conduct the required accurate and thorough enterprise wised risk analysis required by the HIPAA Security Rule. In this respect, the HIPAA Security Rule at 45 C.F.R. § 164.308(a)(1)(ii)(A) requires a covered entity to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI it holds. In its August 31, 2015 response to OCR’s Data Request dated July 23, 2015, DADS acknowledged that, while it had performed ”risk assessment activities” on individual applications and servers, it never performed an “agency-wide” security risk analysis. On July 28, 2017, OCR received the documentation that DADS represented to be the documentation of its risk analysis. After reviewing this evidence, OCR additionally found DADS violated the HIPAA Security Rule by failing to conduct an enterprise-wide risk analysis and implement access and audit controls.

Calculation & Assessment CMPs Totaling $1.6 Million

On May 23, 2018, OCR issued a Letter of Opportunity and informed TX HHSC that OCR’s investigation indicated that TX HHSC failed to comply with the Privacy and Security Rules, which remained unresolved despite OCR’s attempts to do so. The letter stated that pursuant to 45 C.F.R. § 160.312(a)(3), OCR was informing TX HHSC of the preliminary indications of non-compliance and providing TX HHSC with an opportunity to submit written evidence of mitigating factors under 45 C.F.R. § 160.408 or affirmative defenses under 45 C.F.R. § 160.410 for OCR’s consideration in making a CMP determination under 45 C.F.R. § 160.404. The letter identified each area of noncompliance. It also stated that TX HHSC also could submit written evidence to support a waiver of a CMP for the indicated areas of non-compliance.

Although the designated representative for TX HHSC as DADS successor received the Letter of Opportunity on May 24, 2018, . TX HHSC did not provide any written evidence of mitigating factors under 45 C.F.R. § 160.408 or affirmative defenses under 4S C.F.R. § 160.410 for OCR’s consideration in making the CMP determination or submit any written evidence to support a waiver of a CMP for the indicated areas of non-compliance. Accordingly, after securing the requisite approval from the Justice Department, OCR issued a Notice of Proposed Determination of Civil Monetary Penalties (“Proposed CMP”) on July 29, 2019.

As explained by the Proposed CMP, as amended by the HITECH Act, Section 13410, 42 U.S.C. § 1320d-5(a)(3), HIPAA authorizes OCR as the designated representative of the Secretary of HHS to impose CMPs against a covered entity for post-February 18, 2009 HIPAA Privacy or Security Rule violations. These current CMP provisions provide the following rules for the assessment of CMPs for such violations:

A minimum of$100 for each violation where the covered entity or business associate did not know and, by exercising reasonable diligence, would not have known that the covered entity or business associate violated such provision, except that the total amount imposed on the covered entity or business associate for all violations of an identical requirement or prohibition during a calendar year may not exceed $25,000.

A minimum of$1,000 for each violation due to reasonable cause and not to willful neglect, except that the total amount imposed on the covered entity or business associate for all violations of an identical requirement or prohibition during a calendar year may not exceed $100,000. Reasonable cause means an act or omission in which a covered. entity or business associate knew, or by exercising reasonable diligence would have known, that the act or omission violated an administrative simplification provision, but in which the covered entity or business associate did not act with willful neglect.

A minimum of $10,000 for each violation due to willful neglect and corrected within 30 days, except that the total amount imposed on the covered entity or business associate for all violations of an identical requirement or prohibition during a calendar year may not exceed $250,000.

A minimum of$50,000 for each violation due to willful neglect and uncorrected within 30 days, except that the total amount imposed on the covered entity or business associate for all violations of an identical requirement or prohibition during a calendar year may not exceed $1,500,000.

By law, OCR adjusts the CMP ranges and calendar year cap for each penalty tier for inflation. The adjusted amounts are applicable only to CMPs whose violations occurred after November 2, 2015.

The Proposed CMP included notice of the CMPs OCR intended to impose CMPs totaling $1.6 million for the violations. Characterizing each of the violations as due to reasonable cause and not willful neglect, the Proposed CMP Notice made note that OCR was authorized by statute to assess penalties of up to $50,000 per day for each day of the identified violations due for reasonable cause, rather than willful neglect, but authorized OCR to adjust the penalties in light of aggravating and mitigating factors. The Proposed CMP stated that in arriving at the lesser daily penalty amount, OCR considered as mitigating factors that:

The violations did not result in any known physical, financial, or reputational harm to any individuals nor did it hinder any individual’s ability to obtain health care; and

TX HHSC immediately removed the application once it received a report that unauthorized users could access the ePHI of individual beneficiaries.

However, OCR also took note that it viewed DADS failure to act promptly to remediate the breach and to keep a commitment made to OCR in August, 2015 timely to conduct and complete the agency wide risk analysis by August 31, 2016 as an aggravating factor. Considering these factors, the Proposed CMP notified TX HHSC that OCR intended to assess a daily penalty amount of$1,000 per day ($1,141 after November 2, 2015) per violation capped at $100,000 per calendar year per violation. Applying these amounts, the CMP notified TX HHSC that OCR intended to impose CMPs totaling $1.6 million, as follows:

After TX HHSC , as successor to DADS, did not file a request for hearing before an administrative law judge within the 90 days, OCR imposed the $1.6 million CMP in dated October 25, 2019 made public on November 7, 2019.

The latest in a growing series of multimillion dollar CMPs and Resolution Payments assessed and collected by OCR, the TX HHSC CMP illustrates the critical necessity for all covered entities and business both to take appropriate, well-documented action to prevent, timely discover and redress, and report ePHI breaches and otherwise comply with the otherwise applicable requirements of the HIPAA Privacy, Security and Breach Notification Rules including the conduct and continuous maintenance of appropriate enterprise wide security assessments, audits, and oversight. With OCR promising to continue its enforcement, all covered entities and business associates should verify the existence and adequacy of their existing enterprise wide risk assessments and safeguards and procedures for monitoring, investigating potential security risks and other breaches and other HIPAA compliance oversight. Beyond these compliance efforts, the TX HHSC and other CMP actions also drive home the strong advisability for covered entities or business associates that experience a known or potential breach or other violation promptly to investigate and mitigate potential breaches and other violations. As part of these efforts, covered entities and business associates should seek assistance in conducting their assessments as well as responding to any preexisting and emergent breach or other compliance concerns within the scope of attorney-client privilege from qualified legal counsel with the necessary knowledge and experience of HIPAA and other federal and state laws, regulations and administrative and judicial decisions that define and shape their exposure. In the event of a breach or other compliance concern, timely guidance and representation by legal counsel with both experience of these requirements and with dealing with OCR and other agencies may help mitigate exposures by expediting timely and appropriate response.

For More Information

We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation GroupMs. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.

Ms. Stamer is most widely recognized for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.

Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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